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Lim Guan Eng said loan from China to fund in LRT project

Penang state government Chief Minister Lim Guan Eng said it needs loan from China to fund a financial gap in the Penang Light Rail Transit (LRT) project.

Lim said this is the reason why Penang state government is planning to secure a loan from China.

Lim pointed out that the loan, as a government-to-government
agreement, comes with a much lower interest compared to commercial
loans.

"If we can get a loan for a lower interest, why not," he said at a press conference here today.

Lim said the loan is known as a bridging loan and the funds will be used to close a financial gap in the LRT project.

"The project is going to be funded by land reclamation
sales, but it will take up to two years before the state government can
get any earnings," he said.

When asked why a loan and not use its reserve, Lim said the state must keep its reserve for contingency uses.

Yesterday, Lim has denied claims the state government reaped
profits amounting to RM12.5 billion from sales of state land to local
and foreign developers.

He said the malicious allegations are baseless.

Lim was responding to State Umno Liaison Committee chairman
Datuk Seri Zainal Abidin Osman's statement on Sunday which questioned
why the Penang government is applying for a loan from a bank in China,
when it could utilise the revenue from the sales of state land.

Last Thursday, the Penang Legislative Assembly passed a bill
allowing the state government to borrow funds from banks or financial
institutions.

Lim had said the bill was part of an “enabling legislation”
to borrow money from a Chinese government bank to help fund infra
projects.